Practice Exam Question 16. A company offers identity theft protection. It obtain

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Practice Exam Question

16. A company offers identity theft protection. It obtains cli ent leads from banks. Three employee work 40 hours a a week on the leads, at a pay rate of $25 per hour per employee. Each employee identifies an average of 3000 potential leads a week from a list of5.000. An average of 4 percent actually sign up for the service, paying a one- time fee of$70. Material costs are $1,000 per week, and overhead costs are $9,000 per week. Calculate the multi- factor productivity for this operation in fees generated per dollar of input. O3

Explanation / Answer

Multi factor productivity = (possible leads * no of workers * fee * conversion percentage)/(Labor cost + material cost + overehead cost)

possible leads = 3,000

No of workers= 3

Fee = $70

conversion percentage = 4% = 0.04

Labor cost = No of employees * No of hours * Pay rate per hour

= 3 * 40 * 25 = $3000

material cost = $1000

overehead cost = $9,000

Multi factor productivity = (3000*3*70*0.04)/(3,000 + 1,000 + 9,000)

= 25200/13000 = 1.94

Multi factor productivity = 1.94

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